The Dow Stocks That Surged Today

Shortly after opening, The Dow Jones Industrials Average (INDEX: ^DJI) whipsawed higher in early morning trading on better-than-expected Institute of Supply Management (ISM) data. The April numbers jumped to 54.8 from 53.4 last month. This contrasted sharply to the decline many expected. While an impressive performance, investors would do well not to confuse this with the national report which reflects the entire United States. This report is reflective of regional purchasing reports.

The markets reacted strongly, pushing the Dow's high water mark to levels not seen since 2007. Here is a look at how all of the major indices fared:

Index

Gain / Loss

Gain / Loss %

Ending Value

Dow Jones Industrial Average

+65.7

+0.5%

13,279

Nasdaq

+4.1

+0.1%

3,050

S&P 500

+7.9

+0.6%

1,405

Today's starletsToday, the gold metal goes to a split finish between Alcoa (NYS: AA) and Bank of America (NYS: BAC) , both closing up 2.5% for the day. It shouldn't come as any surprise that one of today's top performers is aluminum manufacturer Alcoa, as the ISM data has direct implications for it. Unfortunately for investors, Alcoa and Bank of America have the lowest overall weighting on the Dow, so their combined performance only accounted for about 3% of the Dow's total movement.

For Alcoa, today's jump still sits at the bottom of a sharply lower chart over the last twelve months. At $9.97 per share the company is still about 50% below its 52-week high. That's caused Alcoa's trailing P/E to look artificially high. But, investors shouldn't be worried because with a forward P/E of only 10.6 and a five year estimated growth rate that's about 3% higher than the broad market I think Alcoa has room to run. As the global economy continues to get back on its feet, demand for aluminum should continue to tick higher.

Bank of America has roughly the same story, with a steeply downward trending chart over the last 12 months and a modest blip that is their year-to-date gains. Today's jump is related to the news that it intends to cut costs via 2,000 jobs in the future. Bank of America trades for an even lower forward P/E of 7.8. That's insanely low, and considering that the company still trades for a historically low price-to-book ratio, I think they've got the most upside on the Dow right now, even after today's jump. One Foolish analyst has even outlined a plausible way for them to hit $20 a share.

Runners-upThe silver and bronze metals go to Intel (NAS: INTC) and JP Morgan (NYS: JPM) . Intel was up nearly 2% and touched a new 52-week high today. JP Morgan wasn't far behind with a 1.9% pop for the day. Like Bank of America, the company still trades for dirt cheap price-to-book ratios, and seems like a bargain even after its big run up year to date.

What to make of itWith the market touching multi-year highs it may be tempting to put your money in an index fund to ride the wave, but that'd be a mistake. Warren Buffett didn't get rich by being a passive investor. Real meaningful wealth is built by identifying great companies at cheap prices and holding them over the long term, and that's exactly the type of company our CIO named "The Motley Fool's Top Stock for 2012." You can learn more about this could-be multibagger by clicking here now.